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Sanctions
Jeremy M. Sharp Specialist in Middle Eastern Affairs April 28, 2011
Summary
This report analyzes bilateral issues between the United States and Syria. Unrest in Syria and the Asad governments violent response are adding new complexity to the troubled U.S.-Syrian relationship. The Obama Administrations policy of limited engagement with Syria to address areas of longstanding concern has been met with criticism from some, including some Members of Congress. Critics believe that the Administration should apply further pressure to the Syrian government and consider implementing harsher economic sanctions against it. The use of violence against Syrian protestors has been accompanied by calls for new U.S. sanctions but also some expression of concern by experts that political unrest in Syria could evolve into a broader civil conflict that in turn could destabilize Syrias neighbors. Despite its weak military and lackluster economy, Syria has leveraged its geographic location and its foreign policy alignment to remain relevant in Middle Eastern politics. At times, Syria has participated in substantive negotiations with Israel, from whom it seeks the return of the occupied Golan Heights. However, Syria also acts at times as a spoiler by hosting U.S.-designated Palestinian terrorist groups such as Hamas and facilitating the rearmament of Hezbollah in neighboring Lebanon. Syrias long-standing relationship with Iran is of great concern to U.S. strategists, insofar as Syria serves as a conduit for Iranian power projection in the broader Middle East. As the Syrian government has grown more estranged from the United States over the last ten years, Syrian-Iranian relations have improved, and some analysts have called on U.S. policymakers and their regional allies to offer incentives to Syrian leaders in order to realign them away from Iran. These dynamics are complicated by long-standing U.S. concerns about Syrian sponsorship of terrorism, pursuit of weapons of mass destruction technology, and regional policy in Lebanon and Iraq. A variety of U.S. legislative provisions and executive directives prohibit direct foreign assistance funding to Syria and restrict bilateral trade relations, largely because of the U.S. State Departments designation of Syria as a sponsor of international terrorism. On December 12, 2003, President Bush signed the Syria Accountability Act, H.R. 1828, as P.L. 108-175, which imposed additional economic sanctions against Syria. Syrian individuals and government officials are subject to targeted financial sanctions pursuant to seven executive orders relating to terrorism, proliferation, and regional security. In recent years, the Administration has designated several Syrian entities as weapons proliferators and sanctioned several Russian companies for alleged weapons of mass destruction or advanced weapons sales to Syria. For two years, the Obama Administration attempted to promote some U.S. engagement with Syria, and several Congressional delegations visited Syria during the 111th Congress. However, prior to the outbreak of the recent unrest, the Administration appeared to be shifting tactically toward applying more pressure on the Syrian government to play a more constructive role in stabilizing Lebanon and advancing the Arab-Israeli peace process. The Asad governments use of force to contain growing protests across Syria may reshape congressional attitudes toward Syria, which have varied. Some in Congress may choose to impose new sanctions against the Asad regime. Other lawmakers may seek to continue U.S. engagement as a means of mitigating the unpredictable and potentially negative consequences of the unrest. Many observers believe that the violence could preclude a return to engagement and the offering of incentives to address other issues of U.S. concern, absent a fundamental shift in the Syrian governments actions toward its own citizens.
Contents
Uprising and Crackdown in Syria................................................................................................1 Overview: Syrias Changing Political Landscape and Repercussions For U.S. Policy ............1 Background ..........................................................................................................................1 Recent Developments............................................................................................................2 Daraa.............................................................................................................................2 March 30: Asads Speech ................................................................................................3 April 2011: Regime Brutally Suppresses Protests, Makes Limited Reforms .....................4 Administration and Congressional Response ...................................................................5 Implications ....................................................................................................................6 Issues for Congress .....................................................................................................................7 Syria-Iran-Hezbollah-Hamas: The Axis of Resistance ........................................................7 Syria and Iran .................................................................................................................8 Syrias Role in Lebanon ................................................................................................ 10 The Israeli-Syrian Peace Process ......................................................................................... 12 Russian Arms Sales to Syria................................................................................................ 13 Nuclear Proliferation and the IAEA..................................................................................... 13 Human Rights and Democracy ............................................................................................ 15 U.S.-Syrian Relations................................................................................................................ 17 U.S. Sanctions........................................................................................................................... 17 General Sanctions Applicable to Syria................................................................................. 17 Specific Sanctions Against Syria ......................................................................................... 20 The 2003 Syria Accountability Act ................................................................................ 20 Targeted Financial Sanctions ......................................................................................... 21 Sanctions Against the Commercial Bank of Syria .......................................................... 24 Effect of U.S. Sanctions on Syrias Economy ................................................................ 24
Figures
Figure 1. Map of Syria ................................................................................................................8
Tables
Table 1. U.S.-Syrian Trade Statistics 2005-2010 ........................................................................ 25
Contacts
Author Contact Information ...................................................................................................... 26
Overview: Syrias Changing Political Landscape and Repercussions For U.S. Policy
Since 1970, the Asad family has ruled Syria. President Bashar al Asad, like his father Hafez al Asad before him, has wielded almost total control over domestic politics and has steered the countrys outsized foreign policy to play key roles in multiple arenas in the Middle East (Lebanon, Israel-Palestine, Iran, and Iraq) despite Syrias small size and lack of resources. Now, with the country in turmoil, many observers are interested in how prolonged Syrian instability (or a possible changing of the guard there) might affect other U.S. foreign policy priorities in the region, such as Lebanese stability and countering Hezbollah, limiting Iranian influence, and solving the Arab-Israeli conflict. Unlike in Egypt, where the United States has provided support to the military and democracy assistance to newly empowered political groups, in Syria the U.S. role is more limited. Some U.S. sanctions are already in place and Syria has been ineligible for U.S. aid due to its inclusion on the State Sponsor of Terrorism list. Military and intelligence cooperation is sporadic and limited. Thus, what role the United States can play in Syrias evolving domestic crisis is in question, and policymakers may be searching for channels of influence in order to preserve U.S. interests in a rapidly changing political landscape.
Background
In March 2011, the public anger on display in other Arab countries surfaced in Syria, putting the regime of President Bashar al Asad on the defensive for the first time in his 11-year presidency. While Tunisia and Egypt experienced revolution and Bahrain, Libya, and Yemen continue to struggle with unprecedented degrees of civil unrest and conflict, Syria had largely been free of large-scale public protests that have been occurring elsewhere across the Arab world since December 2010. Syria has long shared many of the socio-economic and political conditions that bred deep dissatisfaction with the status quo in other Arab autocracies, including high unemployment, high inflation, limited upward mobility, rampant corruption, lack of political freedoms, and repressive security forces. These factors fueled opposition to the Syrian government, although activity among exiles largely overshadowed internal opposition in the eyes of most outside observers. Many observers believed that Syrias pervasive police state, its lower level of Internet usage, and deep public sensitivity to avoiding Sunni-Alawite sectarian tensions would serve as a bulwark against spreading unrest. Those assumptions have proven unfounded. Limited calls in February 2011 to organize protests and gatherings failed but a violent government response to an isolated incident in the southern town of Daraa in March provided a decisive spark for the emergence of protest movements. The use of force against demonstrators in Daraa and later in other cities has created a corresponding swell in public anger and public participation in demonstrations. An escalating cycle of tension has continued to intensify, as the Asad government has paired responsiveness to some public demands for political reform with the use of military force against some protestors.
To date, the international community is divided over Syria. On April 27, the United Nations Security Council failed to unanimously issue a press statement calling on Syrias leaders to stop the violence against their own people. Russia is opposed to condemning Syrian behavior, and one official said that The current situation in Syria, despite the increase in tension, does not represent a threat to international peace and security. On the other hand, members of the European Union may be preparing sanctions, an arms embargo, asset freezes, and travel restrictions against Syrian regime officials. As of April 28, 2011, reports suggest that up to 500 civilians have been killed, and expert observers warned of the potential for the unrest to create divisions within the Syrian security forces or among the majority Sunni Arab and Kurdish populations and the ruling minority Alawites.
Recent Developments
On Friday, February 4, activists using social networking sites attempted to launch their own day of rage after prayers, but few demonstrators appeared amidst a heavy presence of security forces. On February 9, the state unexpectedly granted citizens access to Facebook, YouTube, and other popular social media websites as part of President Al Asads pledge to ease Internet restrictions. Critics charged that easing access to social media would allow the government to more closely monitor dissidents, and several Syrian bloggers were subsequently arrested.1 For the next several weeks, small demonstrations persisted, but no single event was able to spark larger public protests.
Daraa
On Friday, March 18, the first large-scale demonstrations took place in multiple locations across Syria, most notably in the southern town of Daraa2 near the Jordanian border (80 miles south of Damascus), where weeks earlier, local police had arrested 15 youths who had sprayed buildings with graffiti, that contained, among other things, the slogan that drove the revolutions in Tunisia and Egypt: The people want the regime to fall.3 With tensions already high, police opened fire on the protestors, killing six. The next day, during funeral processions for the slain victims, an estimated 20,000 people turned the procession into a protest, demanding the resignation of the towns mayor and police chief. Instead, Syrian security forces sealed off Daraa, police continued to use excessive violence to disperse protestors, and the government promised an investigation and sent mediators to calm citizens. On the third day (March 20), crowds chanting no fear after today4 set fire to the Baath Partys headquarters and other government buildings, and police again used live ammunition, killing another demonstrator. Protestors turned a centrally-located mosque in the old quarter of Daraa into a gathering point and makeshift hospital, which police
Open Source Center, Syria: Commentators Question Motives in Lifting Social Media Ban, Document ID# FEA20110301015070, March 1, 2011. 2 The town of Daraa (alt. sp. Dera) is located in Daraa province, a mostly tribal and rural area of some 300,000 Syrians, many of whom are Sunni Muslims. Before the recent outbreak of violence, it was considered an area supportive of the regime. Vice President Farouk al Sharaa is from Daraa province. In recent years, the area has been hit hard by drought, and like many areas beyond the capital Damascus, it had suffered economically. 3 Syria's Revolt: How Graffiti Stirred an Uprising, Time.com, March 22, 2011. 4 Officers Fire on Crowd as Syrian Protests Grow, New York Times, March 20, 2011.
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units subsequently stormed on March 22, resulting in additional casualties (including a prominent local doctor). By March 24, news reports indicated that between 15 and 50 people had been killed by police, as the city had been reinforced by army soldiers and secret police while crowds as large as 20,000 continued to demonstrate and hold funerals for those slain days earlier. Mobile phone access to Daraa was severed as well, and President Asad dismissed the provincial governor. He also pledged to increase salaries for public workers and allow more media freedom. He suggested that he was willing to study the possibility of lifting the emergency law5 (as well as licensing political parties) that had been in place since 1963 (it was lifted in April 2011, see below). On Friday, March 25, a day dubbed as Dignity Friday by protestors in Syria, government forces reportedly opened fire again on demonstrators, killing an unknown number of civilians. By then, confrontations were no longer confined to Daraa and were occurring in several cities, though the capital Damascus was fairly quiet. Protests occurred in the port city of Latakia, where at least 12 people were reportedly killed between March 25 and March 27. Latakia is a mixed Sunni and Alawite town, and the government has deployed the army there to maintain order. By March 27, at least 61 people had died during the government crackdown that started in Daraa on March 18. Many reports indicate that the government has deployed armed gangs or irregular militias to intimidate and kill protestors.
5 The law prohibited public congregations and enabled the authorities to detain people without trial. Protestors had demanded that it be canceled. 6 Syrian Leader Blames Conspiracy for Turmoil, New York Times, March 30, 2011. 7 According to one report, Mr. Assad is surrounded by relatives with reputations for ruthlessness, including his brother Maher al Asad, who commands the armys Fourth Armored Division, and his brother-in-law Assef Shawkat, an intelligence chief. The family is said to fear that easing up on protesters could embolden them, bringing much larger crowds into the streets.
The violence culminated on Friday April 22, when an estimated 109 people were killed in a single day and many other activists and protestors are reported to have simply disappeared. As demonstrations increased with each passing Friday after prayers, the regime admitted that unrest in Syria was not simply a result of foreign meddling. Despite the regimes warning that it would deal harshly with all internal dissent, crowds of protestors kept growing, though some observers suggested that despite the alleged atrocities committed by the security forces, the size of the protests had not reached a critical mass, as they had in Tunisia and Egypt during each countrys respective revolution. Though protests have occurred in Damascus and Aleppo, Syrias second largest city, they have not been on the same scale as elsewhere, perhaps reflecting some degree of popular support for the Asad regime. Toward the end of the month, demonstrations were taking place in most Syrian cities, particularly in Homs where security services were reportedly particularly harsh in their crackdown on residents. On April 25, the regime ordered armored army units to enter towns such as Daraa in a demonstration of President Asads resolve to quash the symbol of where the uprising started. As of April 28, an estimated 500 Syrian citizens have been killed by government forces. Some observers suggest that the casualty count could be even higher since the government has refused to release some of the bodies of protestors killed by police units.
Limited Reforms
In Syria, President Asad has chosen to couple the violent suppression of his security forces with some limited reforms. On April 19, the decades-old Emergency Law was lifted, though many experts believe it will simply be replaced by an anti-terrorism law which will be equally as restrictive as its legal predecessor. According to Radwan Ziadeh, a Syrian human rights activist and visiting scholar at George Washington University in Washington, The emergency law might be lifted but the state of emergency that governs every aspect of our lives will be the same. President Asad also has pledged to loosen media restrictions, abolish state security courts, release political prisoners, and allow approved demonstrations. He has appointed new governors of Homs and Daraa provinces. He also has promised to address longstanding Kurdish grievances such as finding a solution to the estimated 300,000 Kurdish Syrians who have been denied
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"Syrian University Protests Violently Suppressed," New York Times, April 11, 2011.
citizenship for decades. He also has ordered an investigation of police killings. After a meeting with the town leaders of Daraa, President Asad allegedly remarked that I saw how people from Daraa destroyed my fathers statues and my posters, but dont worry. I will forgive that as a father forgives his sons. The Syrian opposition considers these reforms mere window dressing designed to buy the regime time in order to stave off even larger protests. In the meantime, numerous media reports suggest the government has deployed snipers on the rooftops of buildings overlooking street protests, as well as plain-clothes policemen who have attacked citizens. 9 Some reports even suggest that security forces have attacked ambulances and have entered hospitals to commit further violence.
9 Syrians call plain-clothes security agents, usually distinguishable by their black leather jackets, shabbiha (translated literally as ghosts"). 10 In an interview published in late March, Secretary of State Hillary Rodham Clinton remarked that Theres a different leader in Syria now. Many of the members of Congress of both parties who have gone to Syria in recent months have said they believe hes a reformer. Critics assert that the statement implied support for the Asad government. In response, Secretary Clinton insisted that she referenced opinions of others and was not speaking either for myself or for the Administration. 11 Secretary of State Hillary Rodham Clinton stated in late March that each of these situations is unique. She added that Whats been happening there [in Libya] the last few weeks is deeply concerning, but theres a difference between calling out aircraft and indiscriminately strafing and bombing your own cities than police actions [in Syria] which, frankly, have exceeded the use of force that any of us would want to see. "Twelve Killed in Syrian City of Latakia in Fighting With Security Forces," Bloomberg, March 27, 2011.
Implications
Foreign observers are now debating what could result from a period of sustained unrest. Many foreign governments are concerned that a breakdown in law and order in Syria could lead to civil war or sectarian conflict inside Syria or embolden Sunni Islamist groups to carry out operations against foreign targets.12 Other observers also are concerned that Syrian weaponry, including advanced surfaceto-air missiles, advanced anti-tank weapons, or chemical weapons, could fall into the hands of terrorist groups. Israel, which has grown accustomed to having a familiar enemy in the form of the current Syrian regime, may fear that the overthrow of President Asad would lead to a power vacuum and would possibly compel it to increase its force posture on its northern front at a time when Israel is already having to reconsider its defense strategy vis--vis Egypt and facing more rocket attacks from Gaza. 13 There is also uncertainty surrounding how Iran or Hezbollah in Lebanon will react to threats against the Asad regime, their ally. Syrian opposition groups in Europe and the United States have been spreading rumors of Hezbollah fighters quelling protests inside Syria, though these reports remain unconfirmed. Some U.S. reports suggest that the Iranian government has provided some logistical support to the Asad government. According to one unnamed official, There are very strong indications that Iran is helping the
Some protestors have been cautious to portray their movement as nationalist and cross-sectarian. In one march through the coastal town of Banias, crowds chanted Not Sunni, not Allawi. Freedom is what we all want. However, if majority-Alawite units are found to be committing atrocities against Sunni protestors, an increase in sectarian tension may be inevitable despite protestor efforts to the contrary. 13 Some Israelis believe that a democratic Syria is in Israels interest. According to President Shimon Peres, I believe that finally a democratic system in Syria is our best bet for the future.
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Syrians crack down on protesters with advice on how to track or block their Internet use, training on how to put down demonstrations and the supply of riot control equipment.14 On the other hand, the possibility of revolution in Syria may present opportunities for the United States, under some conditions. Few observers expect that a more democratic Syrian government would abandon long-standing nationalist goals of, for instance, seeking a return of the Golan Heights. However, if Syrian protestors somehow succeed in toppling the Asad regime in a peaceful manner, a more democratic Syria may seek to broaden its relationships with Western democracies and could choose to reduce its dependence on its current alliance with Iran. However, most experts believe that this scenario is a distant possibility and it depends on the ability of any Syrian protest movement to overthrow the Asad government without destabilizing the country and upsetting its ethnic/sectarian balance between Alawites, Sunni Muslim Arabs, and Kurds. Early reports indicate that Syrias elite are not unified in supporting the heavy-handed actions of the security forces, and since protests are taking place in areas once considered regime strongholds, that could be an indication that the Asad familys base of support has considerably eroded. On April 27, 233 local members of the ruling Ba'ath Party resigned over the governments siege of Daraa and other towns. 15 Syria also has a number of overlapping security forces and a large standing military, though how loyal the army will be if the crisis deepens also is unknown. Some unconfirmed reports suggest that regular army officers have been killed for refusing to fire on protestors and that the regime has relied exclusively on Alawite-dominated units, including a division led by Mr. Maher al Asad. Some observers suspect that the crisis has already created a series of events that will make it difficult for the regime to recover. One unnamed Western diplomats comments summarize these views: Its over; its just a question of time. It could be a slow burn, or Qaddafi-esque insanity over the next few days. Its very tense here, very tense. You can feel it in the air.16
"Iran said to help Syria track protesters' Web use," Reuters, April 14, 2011. According to Oxford Analytica, The resignations are mostly of local officials, mainly from Dera'a and Banias; those in Baniasa mixed Sunni-Allawi cityare the more important (the roots of dissent in Dera'a are complicated by the presence of the Druze minority and stronger tribal affiliations). See, Oxford Analytica, Ba'athist resignations raise pressure on Syria's Assad, April 28, 2011. 16 Syria Tries to Ease Deep Political Crisis, New York Times, March 27, 2011.
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to U.S. goals in the Middle East. Some experts suggest that even if Syria made peace with Israel, it would not cut its ties entirely to Iran and others. Figure 1. Map of Syria
For many years, Syria and Iraq had an uneven and often troubled relationship, stemming from political disputes, border tensions, demographic differences, and personal animosity between the two countries' late leaders: Syrian President Hafiz al Asad and Iraqi President Saddam Hussein. Moreover, the two countries were governed by rival wings of the pan-Arab Baath Party. Syria severed diplomatic relations with Iraq in 1982 after it accused Saddam Hussein's regime of inciting and supporting Syrian Muslim Brotherhood-led riots. In the late 1990s bilateral relations improved markedly, primarily in the economic sphere. The two countries formally restored relations in November 2006.
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religious affinities.18 In recent years, as Syria has grown more estranged from the West, SyrianIranian relations have improved, and some analysts have called on U.S. policymakers to flip Syria and woo it away from Iran. Others assert that the foundation of the Syrian-Iranian relationshipa shared concern over a resurgent Iraq, support for Hezbollah in Lebanon, and countering Israelis deeply rooted in the geopolitics of the region and cannot be easily overturned. Reliable information on the extent of Iranian economic influence in Syria is difficult to quantify. Nevertheless, there have been several reports of increased Iranian investment and trade with Syria. In the financial sector, Iran has stated its intention to establish a joint Iranian-Syrian bank, possibly involving Bank Saderat and the Commercial Bank of Syria two entities which have been sanctioned by the U.S. Treasury Department.19 In the manufacturing and industrial sectors, the Iran Khodro Industrial Group has established a car assembly plant in Syria through a joint venture known as the Syrian-Iranian Motor Company (Siamco).20 Another joint venture, the Syrian-Iranian Vehicle Company (Siveco), assembles Iranian cars in Syria. Its chief stakeholder is the Iranian company Saipa. Iranian companies also have invested in concrete production, power generation, and urban transportation. In the energy sector, Syria, Iran, Venezuela and Malaysia jointly established a petroleum refinery in Homs, Syria. In addition, Iran and Syria reached a natural gas deal that would allow Iran to export gas to Syria via Iraq (Persian Pipeline). Despite increased Iranian investments, the overall volume of Iranian-Syrian trade remains low. According to the Economist Intelligence Unit, bilateral trade may total between $160 and $400 million.21 Ironically, the total volume of U.S. trade with Syria exceeds that of Iran-Syria. Iran also supplies Syria with weaponry, though Russia and North Korea have traditionally been Syrias two main suppliers. In June 2010, Iran reportedly sent Syria an air defense radar system designed to detect Israeli aircraft or possibly increase the accuracy of Syrian and Hezbollah missile strikes against Israel in the event of a regional war. According to one unnamed U.S. official, The Iranians have two interests. They need Hezbollah to be a powerful threat against Israel, and they are interested in knowing what is coming to them from Israel.22 In response to the alleged transfer, U.S. State Department Spokesman Philip J. Crowley stated that Well, it's hard for us to determine if such a transfer has taken place. We have concerns about the relationship between Iran and Syria. And as we've said before, we don't believe that Iran's designs for the region are in Syria's best interest.23 In March 2011, various news sources reported that an Iranian aircraft suspected of carrying military or nuclear cargo was ordered to stop in Turkey on its way to Syria. The plane was headed for the Syrian city of Aleppo. According to one report, boxes on the plane contained rocket
Thousands of Iranian Shiites visit Syria annually on pilgrimages to several famous shrines and mosques. Iranian state news reported in August 2010 that the bank is to be named Al Aman. Its initial capitalization is estimated at $32 million, and Iran's Saderat Bank, Alghadir Company, and Saipa Company own 25%, 16%, and 8% of the bank's shares respectively. The rest will be offered on Syrias new stock exchange. See, Open Source Center, Iran, Syria To Establish Private Bank In Damascus, IAP20100801950070, Tehran Mehr News Agency in English, August 1, 2010. 20 In May 2010, an Iranian businessman and shareholder in Siamco, was killed outside his home in Damascus in an apparent assassination. No group has claimed responsibility for the killing 21 Syria Economy: Iran Bank Deal?, Economist Intelligence Unit, October 14, 2008. 22 Iran Arms Syria With Radar, Wall Street Journal, June 30, 2010. 23 U.S. State Department Press Release, Daily Press Briefing, July 1, 2010.
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launchers, mortars, Kalashnikov rifles and ammunition, although there was no Turkish official statement on the cargo.24
"Turkey confiscates Iranian plane's "illegal" cargo," Reuters, March 22, 2011. Prime Minister Absolves Syria of Blame over Father's Assassination in Bid to end Tension, The Times (London), November 1, 2010. 26 "Hariri Refuses to Join Government Headed by Hizbullah," Naharnet, January 24, 2011. See also "After Riots and Rage, Lebanon is ready to move on," Haaretz.com, January 27, 2011 27 Hariri Refuses to Join Government Headed by Hizbullah, Naharnet, January 24, 2011. See also After Riots and Rage, Lebanon is ready to move on, Haaretz.com, January 27, 2011.
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against its leadership could destabilize Lebanon. Government officials have denounced the STLs work, and a Syrian judge issued arrest warrants for a number of officials who were accused of having helped provide false testimony to tribunal investigators. In late October 2010, President Asad remarked that The political situation in Lebanon is not goodit is even troubling. Any clash at any given moment will destroy Lebanon.28 Hezbollah has forcefully said that anyone cooperating with the STL will be considered an agent of Israel. At the same time, Syria has benefitted from almost three years of stability in Lebanon and has therefore approached the issue cautiously. At times, it has tried to portray itself as a disinterested third party. Syria and Saudi Arabia have urged all sides in Lebanon to refrain from sectarian strife and have worked to keep the coalition government led by Saad Hariri together. If Hezbollah members are indicted and a trial takes place (perhaps with Hezbollah members in absentia), Syrian officials may be called as witnesses.
Syria Working to Prevent Lebanon Violence: Assad, Agence France Presse, October 26, 2010. International Crisis Group, DRUMS OF WAR: ISRAEL AND THE AXIS OF RESISTANCE, Middle East Report #97, August 2010. 30 Israeli Navy Seizes Weapons Believed to Be for Hezbollah, Wall Street Journal, November 5, 2009.
31 According to Janes, Syria possesses an indigenously produced 'Scud D' variant of the North Korean Hwasong 7 that can travel up to 430 miles. See, Israel Claims Syria has Transferred 'Scuds' to Hizbullah, Jane's Defence Weekly, April 16, 2010. 32 Open Source Center, Syria Sends Scud Missiles to Hizballah, Israel Threatens War, Kuwait Al-Ra'y Online in Arabic, April 11, 2010, GMP20100411184001. 33 "Scud Missiles Spotted from Space may be in the Hands of Hezbollah Militants; Lebanon," The Times (London), October 9, 2010.
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up to 50,000 rockets and missiles, including 40 to 50 Fateh-110 missiles and 10 Scud-D missiles.34
Hamas
Syrias support for Palestinian terrorist groups, such as Hamas, is a major impediment both to improved Israeli-Syrian relations and to Syrias relationship with the United States. In March 2011, Israel intercepted a Liberian-flagged container ship named the Victoria, that contained 50 tons of Iranian smuggled weaponry on its way to Hamas, including Chinese-designed C704 antiship missiles. According to Israeli sources, the cargo was loaded at the Syrian port city of Latakia. For years, U.S. policymakers and some lawmakers have sought Syrian cooperation in moderating Hamas. Syria has indirectly supported a number of U.S. State Department-designated Foreign Terrorist Organizations (FTOs), including Hezbollah in Lebanon and the Palestinian groups Hamas, Palestinian Islamic Jihad (PIJ), the Popular Front for the Liberation of Palestine (PLFP), and the Popular Front for the Liberation of Palestine-General Command (PFLP-GC), all of which have offices in Damascus and operate within Syria's borders. Syria acknowledges its support for Palestinians pursuing armed struggle in Israeli occupied territories and for Hezbollah raids against Israeli forces on the Lebanese border, but insists that these actions represent legitimate resistance activity as distinguished from terrorism.
"U.S. Strains to Stop Arms Flow," New York Times, December 6, 2010. "Direct Israel-Syria talks were close," Associated Press, February 6, 2011.
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treaty or unilateral decision, be held if the Knesset fails to approve the deal by a two-thirds majority (80 votes). The Palestinians and Syria have condemned the new law, which also was criticized by the Israeli left-wing labor party.
The former Soviet Union was a longtime ally of Syria and a main supplier of arms to the Syrian military. Soviet advisors and military personnel were welcomed by the late Syrian President Hafiz al Asad, even as Soviet relations with other Arab governments, such as Egypt, deteriorated after successive Arab defeats at the hands of the Israeli military in 1967 and 1973 respectively. It is estimated that the Soviet Union provided Syria with up to $26 billion worth of arms until 1991. Between 1999 and 2003, Russian-Syrian military relations revived. In 2005, Russia cancelled most of Syrias $13.4 billion debt from previous arms agreements. 37 According to one Israeli analyst, Syria has not purchased any significant weapon system from Russia since the fall of the Soviet Union; the only purchases were the Kornet-E anti-tank missiles (some of which ultimately reached Hizbollah), and the Pantsyr-S1 air defense system. In the past year, Syria was offered a number of MiG-31 planes (almost certainly to be used for intelligence missions). Other Syrian requests, such as the S-300 air defense system or the Iskander-E surface-to-surface missiles, were refused. See, Zvi Magen and Yiftah S. Shapir, Adornment of the Syrian Bride?, INSS Insight, No. 209, September 21, 2010. 38 Syria: PROCUREMENT, Jane's Sentinel Security AssessmentEastern Mediterranean , November 26, 2010. 39 Israel DM Concerned over RF's Yakhont Missile Supply to Syria, Itar-Tass, September 21, 2010.
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collaborating on a secret nuclear program since 1997.40 Since then, senior North Korean officials and scientists from North Korea's Yongbyon nuclear complex reportedly visited Syria several times before construction began at Al Kibar, between 2001 and 2003. In the spring of 2007, Israel reportedly provided the Administration with photographs of the interior of the alleged facility still under construction. According to the Washington Post, the pictures depicted a site similar to the one at Yongbyon, which produces plutonium for nuclear weapons. In June 2008, U.N. inspectors visited some areas surrounding Al Kibar. In late 2008, the U.N. International Atomic Energy Agency (IAEA) concluded that the facility had similarities to a nuclear reactor and chemically processed uranium particles were found at the site, but that a final determination could not be made until Syria provides the necessary transparency.41 Syria has barred any additional IAEA access since 2008. In a follow-up report in early 2009, the IAEA said that enough uranium particles had turned up in soil samples to constitute a significant find. In response, Syria claimed that the uranium particles came from depleted uranium used in Israeli munitions. Syria also claimed that the site was a conventional military base, but then disclosed in February 2009 that a new missile facility had been constructed at Al Kibar.42 The IAEA reported in February 2010 that uranium particles found at a Syrian desert complex bombed by Israel in 2007 point to possible Syrian covert nuclear activity. Previous IAEA reports said only that the uranium particles raised concern because they did not come from Syria's declared inventory. In September 2010, Ambassador Glyn Davies, the Permanent Representative of the United States to the International Atomic Energy Agency (IAEA), told the 35-member IAEA board that unless Syria cooperates with the agencys probe of its suspected nuclear site bombed by Israel in 2007, then the IAEA must consider all available measures and authorities to pursue the verification assurances the international community seeks, in other words, a special inspection. 43 Nevertheless, some suggest that the board is divided over pressuring Syria, and the lack of consensus will lead to continued stalemate. In August, Davies said Our position is we are not going to postpone this indefinitely, we can't. The agency needs to do its duty and it needs to get answers to these questions. A special inspection is one of the tools that is available, so that's something that needs to be considered. In November 2010, the IAEA reported that With the passage of time, some of the information concerning the Dair Alzour site is further deteriorating or has been lost entirely. It is critical, therefore, that Syria actively cooperate with the Agency on these unresolved safeguards implementation issues without further delay.44 In November and December 2010, a German
U.S. Details Reactor in Syria, Washington Post, April 25, 2008. Introductory Statement to the Board of Governors by IAEA Director General Dr. Mohamed ElBaradei, November 27, 2008, Vienna, Austria, IAEA Board of Governors. 42 "Diplomats: Damascus has Built Missile Facility on Suspected Nuclear Site," Associated Press, February 25, 2009.
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The IAEA's director general has the authority to call for a special inspection of suspect facilities in any member country suspected of violating its commitment to non-proliferation. If the member country rejects the IAEA's request, the agency can refer the case to the United Nations Security Council as an act of noncompliance, potentially triggering sanctions. 44 Implementation of the NPT Safeguards Agreement in the Syrian Arab Republic, Report by the Director General, GOV/2010/63, Date: 23 November 2010.
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newspaper revealed three suspected nuclear sites related to the Al Kibar near the cities/towns of Masyaf, the village of Marj as-Sultan near Damascus, and Iskandariyah.45 In addition to the suspected reactor, the IAEA is investigating other nuclear activities which Syria failed to disclose to the agency. 46 For example, the IAEA is investigating the origin of anthropogenic uranium particles found at a Syrian research reactor, as well as evidence of undeclared uranium conversion activities in the country. Damascus has not yet provided all of the information and site access that would enable the agency to resolve its outstanding questions about these suspected activities. Syrias Foreign Minister stated in a February 6, 2011, letter to IAEA Director General Yukiya Amano that Syria would continue to work with the IAEA to resolve all outstanding technical issues in accordance with the countrys IAEA and NPT commitments. Syria subsequently agreed to allow IAEA inspectors to visit a site at Homs, where Syria has produced nuclear material used in experiments at the research reactor facility discussed above. the IAEA has requested access to the site for some time.
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intelligence services, the socialist pan-Arab Bath Party,49and various Sunni business families, has persisted for four decades and shows no sign of weakening. Second, the Alawites, as a religious minority, fear sectarian conflict and are committed to maintaining the primacy of the their community, and the Asads have sought with some success to coopt support from other sects; many senior positions, including that of prime minister, are held by members of the Sunni Muslim majority. However, most key positions, particularly in the security institutions, remain in Alawite hands, and some observers believe that any weakening of the central regime or an outbreak of political turmoil could precipitate a power struggle between entrenched Alawites and the majority Sunni Muslims, who comprise over 70% of the population. In addition to the Sunni Muslims, Syria has several religious sectarian minorities including three small sects related to Islam (Alawites, Druze, and Ismailis) and several Christian denominations. Since its independence in 1946, Syria has defined itself as an Arab state, despite the presence of a large, ethnically distinct Kurdish population in Damascus and in several non-contiguous areas along Syrias borders with Turkey and Iraq. Syrias Kurds are the largest distinct ethnic/linguistic minority in Syria (7%-10% of total population). Discrimination against Kurdish citizens is prevalent, and Kurdish political activism is not tolerated. Before protests broke out in March 2011, there had been little organized political opposition in Syria. Once considered the most imminent threat to Syrian stability, the Syrian Muslim Brotherhood, formerly the largest Islamist opposition group, has been largely in exile since its crushing defeat at the hands of the Asad regime in 1982, when Syrian forces attacked the Brotherhoods stronghold in the city of Hama and killed approximately 10,000 people. In 2005, a group of 274 civil society activists, reformers, communists, Kurdish rights advocates, Islamists, and intellectuals signed the Damascus Declaration, a document calling for the Syrian government to end the decades-old state of emergency and allow greater freedom of speech. Some signatories were subsequently arrested. Since it is difficult for opposition activists to organize inside Syria, an array of dissident groups and individuals operate abroad, particularly in Western Europe. In 2010, the Democracy Council of California conducted a public opinion survey inside Syria. The survey, which was not approved by the Syrian government, resulted in many findings. Among these are the following: first, a majority believes that the political and economic condition of Syria is poor, and worse than it was five years ago; second, a majority has little faith in the governments ability to confront the countrys problems; third, a substantial majority believes that corruption is widespread; and, fourth, a substantial majority believes that the State of Emergency should be lifted.50
(...continued) political life since then. 49 The socialist, pan-Arab Bath Party, whose rival wing governed Iraq before the collapse of Saddam Husseins regime, came to power in Syria in 1963. Although the Syrian constitution specifies a leading role for the Bath Party and the party provides the regime with political legitimacy, the Bath is more an instrument for the execution of policy than an originator of policy. Many Bathists are not Alawites, but there is a complex synergistic relationship between the party and the community. Still, barring a major governmental change, a Syrian leader would need to enjoy the support of the Bath Party apparatus. The partys top decision-making body, known as the Regional Command, sits at the top of the policy-making process, and membership in this body is a stepping stone to top positions in Syria. 50 Democracy Council Of California, Survey Findings: Syria 2010 Public Opinion Survey, August 5, 2010.
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U.S.-Syrian Relations
Though the Obama Administration has made small gestures toward the Asad government, such as sending several high level delegations to Damascus for discussions51 and allowing sanctionsexempted materials to be exported to Syria, it has not fundamentally changed the U.S. approach to Syria that was established during the George W. Bush Administration. U.S. sanctions have remained in force since President Obama took office in January 2009. Barring an unforeseen breakthrough in Israeli-Syrian relations, most observers contend that the United States and Syria will remain at odds over a host of issues, such as Iran, Hezbollah, and nuclear proliferation (among others), for the foreseeable future. According to Paul Salem, an expert at the Carnegie Endowment for International Peace, Syria wants to engage but it is not desperate. It has no real dependency on the US particularly as the peace process is pretty much dead. Syria is doing well with Turkey, the Gulf, the Saudis, China, some European countries. The US is not the only game in town.52
U.S. Sanctions
Syria remains a U.S.-designated State Sponsor of Terrorism and is therefore subject to a number of U.S. sanctions. Syria was placed on the State Departments State Sponsors of Terrorism List in 1979. Moreover, between 2003 and 2006 Congress passed legislation and President Bush issued new Executive Orders that expanded U.S. sanctions on Syria. At present, a variety of legislative provisions and executive directives prohibit U.S. aid to Syria and restrict bilateral trade.53 Principal examples follow.
U.S. Special Envoy for Middle East Peace Senator George Mitchell has made several trips to Syria. His deputy, Fred Hof, also has traveled to Syria to jumpstart Syrian-Israeli peace negotiations. In September 2010, Secretary Clinton met with Syrian Foreign Minister Walid Mouallem on the sidelines of the U.N. General Assembly meeting in New York. In June 2010, State Department officials and a delegation of American senior executives from Microsoft Corp., Dell Inc., Cisco Systems Inc., and Symantec Corp. traveled to Damascus and Aleppo for meetings with President Asad and Syrian businessmen. The visit was intended to encourage the Syrian government to promote free speech over the Internet and pass legislation safeguarding intellectual property. Most analysts believe that at a macro level, the delegation was intended to show Syria what the benefits of a better relationship with the United States could look like if it provided the diplomatic cooperation being sought by the Administration. 52 US-Iran Dynamic: Why U.S. Effort to Leverage Syria is Flagging, Christian Science Monitor, July 3, 2010. Because of a number of legal restrictions and U.S. sanctions, many resulting from Syrias designation as a country supportive of international terrorism, Syria is no longer eligible to receive U.S. foreign assistance. Between 1950 and 1981, the United States provided a total of $627.4 million in aid to Syria: $34.0 million in development assistance, $438.0 million in economic support, and $155.4 million in food assistance. Most of this aid was provided during a brief warming trend in bilateral relations between 1974 and 1979. Significant projects funded under U.S. aid included water supply, irrigation, rural roads and electrification, and health and agricultural research. No aid has been provided to Syria since 1981, when the last aid programs were closed out.
53
51
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Assistance Act of 1961 as Section 620A [22 USC 2371]. (Syria was not affected by this ban until 1979, as explained below.) The International Emergency Economic Powers Act of 1977 [Title II of P.L. 95-223 (codified at 50 U.S.C. 1701 et seq.)]. Under the International Emergency Economic Powers Act (IEEPA), the President has broad powers pursuant to a declaration of a national emergency with respect to a threat which has its source in whole or substantial part outside the United States, to the national security, foreign policy, or economy of the United States. These powers include the ability to seize foreign assets under U.S. jurisdiction, to prohibit any transactions in foreign exchange, to prohibit payments between financial institutions involving foreign currency, and to prohibit the import or export of foreign currency. The Export Administration Act of 1979 [P.L. 96-72]. Section 6(i) of this act [93 Stat. 515] required the Secretary of Commerce and the Secretary of State to notify Congress before licensing export of goods or technology valued at more than $7 million to countries determined to have supported acts of international terrorism. (Amendments adopted in 1985 and 1986 relettered Section 6(i) as 6(j) and lowered the threshold for notification from $7 million to $1 million.) A by-product of these two laws was the so-called state sponsors of terrorism list. This list is prepared annually by the State Department in accordance with Section 6(j) of the Export Administration Act. The list identifies those countries that repeatedly have provided support for acts of international terrorism. Syria has appeared on this list ever since it was first prepared in 1979; it appears most recently in the State Departments annual publication Country Reports on Terrorism, 2009, issued on August 5, 2010. Syrias inclusion on this list in 1979 triggered the above-mentioned aid sanctions under P.L. 94-329 and trade restrictions under P.L. 96-72. Omnibus Diplomatic Security and Antiterrorism Act of 1986 [P.L. 99-399]. Section 509(a) of this act [100 Stat. 853] amended Section 40 of the Arms Export Control Act to prohibit export of items on the munitions list to countries determined to be supportive of international terrorism, thus banning any U.S. military equipment sales to Syria. (This ban was reaffirmed by the AntiTerrorism and Arms Export Amendments Act of 1989see below.) Also, 10 U.S.C. 2249a bans obligation of U.S. Defense Department funds for assistance to countries on the terrorism list. Omnibus Budget Reconciliation Act of 1986 [P.L. 99-509]. Section 8041(a) of this act [100 Stat. 1962] amended the Internal Revenue Code of 1954 to deny foreign tax credits on income or war profits from countries identified by the Secretary of State as supporting international terrorism. [26 USC 901(j)]. The President was given authority to waive this provision under Section 601 of the Trade and Development Act of 2000 (P.L. 106-200, May 18, 2000). The Anti-Terrorism and Arms Export Control Amendments Act of 1989 [P.L. 101-222]. Section 4 amended Section 6(j) of the Export Administration Act to impose a congressional notification and licensing requirement for export of goods or technology, irrespective of dollar value, to countries on the terrorism list, if such exports could contribute to their military capability or enhance their ability to support terrorism. Section 4 also prescribes conditions for removing a country from the terrorism list: prior notification by the President to the Speaker of the House of Representatives and the chairmen of two specified committees of the Senate. In conjunction with the requisite notification, the President must certify that the country has met several conditions that clearly indicate it is no
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longer involved in supporting terrorist activity. (In some cases, certification must be provided 45 days in advance of removal of a country from the terrorist list). The Anti-Economic Discrimination Act of 1994 [Part C, P.L. 103-236, the Foreign Relations Authorization Act, FY1994-1995]. Section 564(a) bans the sale or lease of U.S. defense articles and services to any country that questions U.S. firms about their compliance with the Arab boycott of Israel. Section 564(b) contains provisions for a presidential waiver, but no such waiver has been exercised in Syrias case. Again, this provision is moot in Syrias case because of other prohibitions already in effect. The Antiterrorism and Effective Death Penalty Act of 1996 [P.L. 104-132]. This act requires the President to withhold aid to third countries that provide assistance (Section 325) or lethal military equipment (Section 326) to countries on the terrorism list, but allows the President to waive this provision on grounds of national interest. A similar provision banning aid to third countries that sell lethal equipment to countries on the terrorism list is contained in Section 549 of the Foreign Operations Appropriations Act for FY2001 (H.R. 5526, passed by reference in H.R. 4811, which was signed by President Clinton as P.L. 106-429 on November 6, 2000). Also, Section 321 of P.L. 104-132 makes it a criminal offense for U.S. persons (citizens or resident aliens) to engage in financial transactions with governments of countries on the terrorism list, except as provided in regulations issued by the Department of the Treasury in consultation with the Secretary of State. In the case of Syria, the implementing regulation prohibits such transactions with respect to which the United States person knows or has reasonable cause to believe that the financial transaction poses a risk of furthering terrorist acts in the United States. (31 CFR 596, published in the Federal Register August 23, 1996, p. 43462.) In the fall of 1996, the then Chairman of the House International Relations Committee reportedly protested to then President Clinton about the Treasury Departments implementing regulation, which he described as a special loophole for Syria. In addition to the general sanctions listed above, specific provisions in foreign assistance appropriations legislation enacted since 1981 have barred Syria by name from receiving U.S. aid. The most recent ban appears in Section 7007 of P.L. 111-117, the Consolidated Appropriations Act, 2010, which states that None of the funds appropriated or otherwise made available pursuant to titles III through VI of this Act shall be obligated or expended to finance directly any assistance or reparations for the governments of Cuba, North Korea, Iran, or Syria: Provided, That for purposes of this section, the prohibition on obligations or expenditures shall include direct loans, credits, insurance and guarantees of the Export-Import Bank or its agents. Section 307 of the Foreign Assistance Act of 1961, amended by Section 431 of the Foreign Relations Authorization Act for FY1994-1995 (P.L. 103-236, April 30, 1994), requires the United States to withhold a proportionate share of contributions to international organizations for programs that benefit eight specified countries or entities, including Syria. The Iran Nonproliferation Act of 2000, P.L. 106-178, was amended by P.L. 109-112 to make its provisions applicable to Syria as well as Iran. The amended act, known as the Iran and Syria Nonproliferation Act, requires the President to submit semi-annual reports to designated congressional committees, identifying any persons involved in arms transfers to or from Iran or Syria; also, the act authorizes the President to impose various sanctions against such individuals. On October 13, 2006, President Bush signed P.L. 109-353 which expanded the scope of the original law by adding North Korea to its provisions, thereby renaming the law the Iran, North
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Korea, and Syria Nonproliferation Act (or INKSNA for short). The list of Syrian entities designated under INKSNA include: Army Supply Bureau (2008), Syrian Navy (2009), Syrian Air Force (2009), and Ministry of Defense (2008). 54
Implementation
On May 11, 2004, President Bush issued Executive Order 13338, implementing the provisions of P.L. 108-175, including the bans on munitions and dual use items (Section 5(a)(1)) and two sanctions from the menu of six listed in Section 5(a)(2). The two sanctions he chose were the ban on exports to Syria other than food and medicine (Section 5(a)(2)(A) and the ban on Syrian aircraft landing in or overflying the United States (Section 5(a)(2)(D). In issuing his executive
54 See, State Department Press Releases And Documents Near East: Iran, North Korea, and Syria Nonproliferation Act: Imposed Sanctions, July 20, 2010. 55 Syrias inclusion on the State Sponsors of Terrorism List as well as SALSA requires the President to restrict the export of any items to Syria that appear on the U.S. Munitions List (weapons, ammunition) or Commerce Control List (dual-use items).
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order, the President stated that Syria has failed to take significant, concrete steps to address the concerns that led to the enactment of the Syria Accountability Act. The President also imposed two additional sanctions based on other legislation. Under Section 311 of the USA PATRIOT Act, he instructed the Treasury Department to prepare a rule requiring U.S. financial institutions to sever correspondent accounts with the Commercial Bank of Syria because of money laundering concerns. Under the International Emergency Economic Powers Act (IEEPA), he issued instructions to freeze assets of certain Syrian individuals and government entities involved in supporting policies inimical to the United States.
Waivers
In the executive order and in an accompanying letter to Congress, President Bush cited the waiver authority contained in Section 5(b) of the Syria Accountability Act and stated that he wished to issue the following waivers on grounds of national security: Regarding Section 5(a)(1) and 5(a)(2)(A): The following exports are permitted: products in support of activities of the U.S. government; medicines otherwise banned because of potential dual use; aircraft parts necessary for flight safety; informational materials; telecommunications equipment to promote free flow of information; certain software and technology; products in support of U.N. operations; and certain exports of a temporary nature.56
Regarding Section 5(a)(2)(D): The following operations are permitted: takeoff/landing of Syrian aircraft chartered to transport Syrian officials on official business to the United States; takeoff/landing for non-traffic and non-scheduled stops; takeoff/landing associated with an emergency; and overflights of U.S. territory.
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section 202(d) of the National Emergencies Act (50 U.S.C. 1622(d)), the President has annually extended his authority to block the property of individual Syrians (latest on May 3, 2010). When issuing each extension, the President has noted that the actions and policies of the government of Syria continued to pose an unusual and extraordinary threat.58 The following individuals and entities have been targeted by the U.S. Treasury Department (Office of Foreign Assets Control or OFAC): On June 30, 2005, the U.S. Treasury Department designated two senior Syrian officials involved in Lebanon affairs, Syrias then-Interior Minister and its head of military intelligence in Lebanon (respectively, the late General Kanaan and General Ghazali), as Specially Designated Nationals, thereby freezing any assets they may have in the United States and banning any U.S. persons, including U.S. financial institutions outside of the United States, from conducting transactions with them. 59 Kanaan allegedly committed suicide in October 2005, though some have speculated that he may have been murdered. On January 18, 2006, U.S. Treasury Department took the same actions against the Presidents brother-in-law, Assef Shawkat, chief of military intelligence. On April 26, 2006, President Bush issued Executive Order 13399 that authorized the secretary of the Treasury to freeze the U.S.-based assets of anyone found to be involved in the February 2005 assassination of former Lebanese Prime Minister Rafiq Hariri. It also affects anyone involved in bombings or assassinations in Lebanon since October 2004, or anyone hindering the international investigation into the Hariri assassination. The order allows the United States to comply with UNSCR 1636, which calls on all states to freeze the assets of those persons designated by the investigating commission or the government of Lebanon to be involved in the Hariri assassination. On August 15, 2006, the U.S. Treasury Department froze assets of two other senior Syrian officers: Major General Hisham Ikhtiyar, for allegedly contributing to Syrias support of foreign terrorist organizations including Hezbollah; and Brigadier General Jamaa Jamaa, for allegedly playing a central part in Syrias intelligence operations in Lebanon during the Syrian occupation.60 On January 4, 2007, the U.S. Treasury Department designated three Syrian entities, the Syrian Higher Institute of Applied Science and Technology, the Electronics Institute, and the National Standards and Calibration Laboratory, as weapons proliferators under an executive order (E.O.13382) based on the
The President last extended the State of Emergency on May 3, 2010, stating that While the Syrian government has made some progress in suppressing foreign fighter networks infiltrating suicide bombers into Iraq, its actions and polices, including continuing support for terrorist organizations and pursuit of weapons of mass destruction and missile programs, pose a continuing unusual and extraordinary threat to the national security, foreign policy, and economy of the United States. For these reasons, I have determined that it is necessary to continue in effect the national emergency declared with respect to this threat and to maintain in force the sanctions to address this national emergency. As we have communicated to the Syrian government directly, Syrian actions will determine whether this national emergency is renewed or terminated in the future. See, Message to the Congress Continuing the National Emergency with Respect to Syria, The White House, Office of the Press Secretary, May 3, 2010. 59 See, http://www.treas.gov/press/releases/js2617.htm. 60 See, http://www.treas.gov/press/releases/hp60.htm.
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authority vested to the President under IEEPA. The three state-sponsored institutions are divisions of Syrias Scientific Studies and Research Center, which was designated by President Bush as a weapons proliferator in June 2005 for research on the development of biological and chemical weapons.61 On August 1, 2007, the President issued E.O. 1344162 blocking the property of persons undermining the sovereignty of Lebanon or its democratic processes and institutions. On November 5, 2007, the U.S. Treasury Department designated four individuals reportedly affiliated with the Syrian regimes efforts to reassert Syrian control over the Lebanese political system, including Assaad Halim Hardan, Wiam Wahhab and Hafiz Makhluf (under the authority of E.O.13441) and Muhammad Nasif Khayrbik (under the authority of E.O.13338).63 On February 13, 2008, President Bush issued another Order (E.O.13460) blocking the property of senior Syrian officials. According to the U.S. Treasury Department, the order targets individuals and entities determined to be responsible for or who have benefitted from the public corruption of senior officials of the Syrian regime. The order also revises a provision in Executive Order 13338 to block the property of Syrian officials who have undermined U.S. and international efforts to stabilize Iraq.64 One week later, under the authority of E.O.13460, the U.S. Treasury Department froze the U.S. assets and restricted the financial transactions of Rami Makhluf, the 38 year-old cousin of President Bashar al Asad. Makhluf is a powerful Syrian businessman who serves as an interlocutor between foreign investors and Syrian companies. According to one report, Since a military coup in 1969, the Asads have controlled politics while the Makhlufs have been big business players. The tradition continues in the next generation, with Bashar al-Assad (sic) as president and Rami Makhluf as a leading force in business.65 Makhluf is a major stakeholder in Syriatel, the countrys largest mobile phone operator. In 2008, the Turkish company Turkcell was in talks to purchase Syriatel, but, according to Reuters, negotiations over the sale were taking longer than expected because some Turkcell executives have U.S. passports.66 Then, in August 2008, Turkcell said it had frozen its plans for a venture in Syria amid U.S. opposition to the project. Makhlufs holding company, Cham, is involved in several other large deals, including an agreement with Syrias state airline and a Kuwaiti company to set up a new airline. Several months ago, Dubai-based real-estate company Emaar Properties announced it had
See, http://www.treas.gov/press/releases/hp216.htm. On July 29, 2010, President Obama extended that National Emergency with respect to Lebanon for another year, stating that While there have been some recent positive developments in the Syrian-Lebanese relationship, continuing arms transfers to Hizballah that include increasingly sophisticated weapons systems serve to undermine Lebanese sovereignty, contribute to political and economic instability in Lebanon, and continue to pose an unusual and extraordinary threat to the national security and foreign policy of the United States. See, Notice of July 29, 2010 Continuation of the National Emergency With Respect to the Actions of Certain Persons to Undermine the Sovereignty of Lebanon or Its Democratic Processes and Institutions, Federal Register, Title 3The President, [Page 45045]. 63 See, http://www.treas.gov/press/releases/hp666.htm. 64 A previous executive order, E.O. 13315, blocks property of former Iraqi President Saddam Hussein and members of his former regime. On June 9, 2005, the Treasury Department blocked property and interests of a Syrian company, SES International Corp., and two of its officials under the authority of E.O.13315. 65 Sanctions on Businessman Target Syrias Inner Sanctum, Washington Post, February 22, 2008. 66 Turkcell Continues Talks on Syriatel Stake, Reuters, April 14, 2008.
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agreed to set up a $100 million venture with Cham to develop real estate projects in Syria. Makhluf also is a minority shareholder in Gulfsands Petroleum,67 a publicly-traded, United Kingdom-incorporated energy company. According to the Wall Street Journal, a Gulfsands executive said the Treasury Departments sanctioning of Makhlouf would have no impact on the company pursuing its partnership with Cham.68
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Accountability and Lebanese Sovereignty Restoration Act (P.L. 108-175).72 In October 2010, Syrias Transport Minister suggested that due to U.S. sanctions, Syria would consider buying six Russian Tupolev Tu-204 planes for Syrian Air. According to one report, General Electric, the French power company Alstom, and Japaneseowned Mitsubishi all declined to bid on a Syrian government contract for the construction of power plants.73 As mentioned above, Turkcell withdrew its bid to purchase Syriatel in August 2008 after the United States sanctioned Syriatels primary stakeholder, Rami Makluf. U.S. sanctions under the Patriot Act against the Commercial Bank of Syria have deterred private Western banks from opening branches inside Syria. As Syrias energy production levels decline, sanctions have prevented major Western energy companies from making new investments there, though other foreign companies have supplanted U.S. firms. One company, Gulfsands Petroleum, moved its principle office to London in order to circumvent U.S. sanctions against its local partner, Rami Makluf. Syria is still an importer of U.S. agricultural products such as corn and soybeans. According to the U.S. embassy in Damascus, the United States is Syrias primary corn supplier, and corn sales from the United States to Syria increased from $61 million in 2001 to $102 million in 2005. Soybean exports also increased from approximately $1 million in 2001 to $28 million in 2005. For the last five years, eastern Syria has experienced a severe drought which has wiped out significant portions of the livestock industry and curtailed wheat farming. Syria used to export wheat, and it is now a net importer, mainly from Russia and the Ukraine. Although U.S. sanctions have deterred American and some foreign investment in Syria, other countries have sought entry into the Syrian market. 74 Foreign investment from the Arab Gulf States and Iran has been substantial in recent years. Syria's largest trading partners within the Middle East are Saudi Arabia ($1.9 billion), Egypt ($1 billion), Lebanon ($600 million) and Jordan ($560 million). Syria's primary non-Arab trading partners are Italy ($3.5 billion total volume), France ($1.2 billion), China ($1.1 billion), and Turkey ($1.1 billion).75 Table 1. U.S.-Syrian Trade Statistics 2005-2010
($ in millions)
2005 U.S. Exports to Syria U.S. Imports from Syria Totals $155.0 $323.5 $478.5 2006 $224.3 $213.7 $438.0 2007 $361.4 $110.5 $471.9 2008 $408.8 $352.0 $760.8 2009 $300.0 $285.9 $585.9 2010 $506.2 $428.7 $934.9
Source: TradeStats Express National Trade Data, Presented by the Office of Trade and Industry Information (OTII), Manufacturing and Services, International Trade Administration, U.S. Department of Commerce.
72 73 74
US prohibited Airbus selling planes to Syria: Damascus, Agence France Presse, December 29, 2009. Tired of Energy Ills, Syrians Doubt the West Is to Blame, New York Times, August 15, 2007.
According to one study by the German Marshall Fund, From 2000 to 2009, the stock of FDI [foreign direct investment] in Syria witnessed a sharp increase from $1.244 billion to $7.334 billion. Specifically, in the 2007-2009 period alone, the stock has increased by more than $4 billion. See, Franco Zallio, The Future of Syrias Economic Reforms between Regional Integration and Relations with the West, Mediterranean Policy ProgramSeries on the Region and the Economic Crisis, German Marshall Fund, November 2010. 75 U.S. Department of Commerce, Doing Business in Syria: 2009 Country Commercial Guide for U.S. Companies.
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According to the Department of Energys Energy Information Administration, Since peaking at 583,000 barrels per day (bbl/d) in 1996, Syrian crude oil production declined. Syria produced an estimated 387,000 bbl/d in January 2011, down from 390,000 bbl/d in 2008. U.S. Energy Information Administration, International Energy Statistics, April 28, 2011. 77 Syria needs electric power generation, as its demand is projected to nearly triple by 2025. Already, during the summer months, some Syrians experience lengthy power outages. Companies from Russia, China, India, Qatar, and Iran, among others, have invested in Syrias electricity sector. Syria also receives natural gas from Egypt and Turkey. See, Damascus Turns to Private Sector, Middle East Economic Digest, May 14, 2010.
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